On July 23 of the current year, Dakota Mining Company pays $7,469,280 for land estimated to contain 9,576,000 tons of recoverable ore. It installs and pays for machinery costing $1,244,880 on July 25. The company removes and sells 493,250 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.

On July 23 of the current year, Dakota Mining Company pays $7,469,280 for land estimated to contain 9,576,000 tons of recoverable ore. It installs and pays for machinery costing $1,244,880 on July 25. The company removes and sells 493,250 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined. Required: Prepare entries to record the following. (a) The purchase of the land. (b) The cost and installation of machinery. (c) The first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.

Name: On July 23 of the current year, Dakota Mining Company pays $7,469,280
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Description: On July 23 of the current year, Dakota Mining Company pays $7,469,280 for land estimated to contain 9,576,000 tons ofrecoverable ore. It installs and pays for machinery costing $1,244,880 on July 25. The company removes and sells493,250 tons of ore

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 6PB: Underwoods Miners recently purchased the rights to a diamond mine. It is estimated that there are...

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